A few more of the UK brokers who announced their clean fund pricing in the last couple of weeks also announced revised charges for shares at the same time. The main changes were:

Halifax Share Dealing will raise its online dealing rate for shares from £11.95 to £12.50. Telephone deals move to a flat rate of £25. Foreign currency charges for international shares rise from 1% to 1.25%. Charges for corporate actions have mostly been dropped. Transfer out fees from a dealing account or ISA remain £25 per investment, but the total has been capped at £125. Changes take effect 31st March 2014.

iWeb Share Dealing, which is the Halifax service under a different, mostly cheaper (but still-Halifax-owned) brand, has apparently also some similar changes, dropping corporate action fees and capping transfer out charges at £125. The ISA closure fee (previously £50) has also been removed. Less positively, the regular dealing option for stocks will also disappear (it seems to be retained under the Halifax service). (There’s no statement about this on the website – the update solely concerns fund charging – but iWeb clients say they’ve received an email about the changes.) Changes take effect 31st March 2014.

BestInvest has replaced its quarterly custody charge for shares (£12.5+VAT in a dealing account or ISA and £25+VAT in a SIPP), with a new fee covering all investments (eg both shares and funds) [PDF]. For a dealing account, this is 0.4% up to £250,000, 0.2% between £250,000 and £1,000,000, and no further charge for holdings above £1,000,000; for a SIPP, the tiers are 0.3% and 0.2% (yes, the SIPP fee is less than an ISA or dealing account). Changes take effect from 1st March 2014.

Barclays Stockbrokers has reduced UK dealing commissions by £1 per trade and reduced the tier sizes for frequent trader rates. Clients who make 1-9 trades per month will pay £11.95 per deal, those make 10-19 will pay £8.95 and those who make 20 or more will pay £5.95 (previous commissions were £12.95 for 1-14 trades, £9.95 for 15-24 trades and £5.95 for 25+ trades). The ISA administration fee is now £30+VAT per year for all ISA sizes (previously it was £50+VAT for accounts over £7,500). Changes take effect from 1 March 2014.

The ban on UK execution-only brokers receiving trail commission takes effect in April 2014, so the few providers who have not yet announced their revised charges have been rushing to do so.

Fidelity FundsNetwork

Taking FundsNetwork first, Fidelity will be charging a relatively straightforward 0.35% on fund holdings up to £250,000 and 0.2% from £250,000 to £1,000,000 (stocks, investment trusts and ETFs are not affected – the Fidelity share dealing service is a white label service operated by Charles Stanley). There’s no minimum charge.

That’s towards the middle of the pack on costs – the lack of a minimum fee means it’s better than some for smaller portfolios, but will be beaten by – for example – Charles Stanley Direct (Charles Stanley’s own d2c fund and share platform, not to be confused with the aforementioned white label share dealing operated for Fidelity).

If you’d prefer to use the FundsNetwork platform anyway, Fidelity’s direct pricing can still be beaten by using Cavendish Online, which is an execution-only broker that uses Funds Network. The cost here is 0.25%, with FundsNetwork taking 0.2% and Cavendish getting 0.05%. (This is Fidelity’s pricing for intermediaries of 0.25%, announced a couple of years ago, but with the fee split between Fidelity and Cavendish and a waiver of the £45 account fee.)

So at present, there is no reason that I’m aware of to go direct to Fidelity (and never has been – FundsNetwork has always been cheaper via Cavendish and other intermediaries.)

Hargreaves Lansdown has finally unveiled its new charging structure to comply with the impending ban on platform receiving trail commissions from funds. As with other firms, this represents a major shake-up of its business model for funds, but the impact on equity investors was limited. The major changes are:

The custody fee for equities, ETFs and investment trusts in an ISA or SIPP was cut to 0.45% per year, from 0.5%, in line with the new charge for funds. The caps of £45 for an ISA and £200 for a SIPP remain unchanged.

Investment trusts held in a regular dealing account will also be charged at 0.45% (max £45), as in an ISA. The new charge does not apply to shares and ETFs. This decision seems to be proving unpopular along clients and understandably so. It might reflect a fear that clients could begin switching out of open-end funds (especially non-trail paying ones where custody fees were relatively low under the old model, but will now be 0.45%) into investment trusts.

There is now a £10+VAT fee for some corporate actions (rights issues and other events “requiring us to seek and act on your instructions”).

Closing an account will now carry a £25+VAT fee.

The new charges will take effect from 1st March (with the exception of the account closure fee, which comes in from June). I have updated Hargreaves Lansdown’s entry in the broker directory and the UK online stockbroker table.

The impact on investors who hold funds will be much greater. Many should be better off, as the combination of the 0.45% custody charge and lower TERs on clean share classes of funds should mean lower total costs than on the old commission-paying share classes. However, some investors – for example those who hold Vanguard index funds, which didn’t pay trail and were previously subject to a fixed custody charge of a few pounds per year – will often be much worse off, as they will now attract the uncapped 0.45% fee.

The fee for a regular dealing account and an ISA rises from £10+VAT per quarter to £18.75+VAT per quarter. The annual fee for a Sipp rises from £135+VAT to £155+VAT.

Charges for corporate actions have been removed

Transfer out fees are now a flat fee for transferring the whole account rather than a per-investment fee. This is quite an interesting decision since almost all UK brokers charge a per-investment fee and might reflect recent cases where the FSA/FCA has forced providers to waive transfer charges when increasing their fees (a precedent that AJ Bell Youinvest/Sippdeal now seems ready to try to fight over its latest fee changes).

I’ve also updated the entry for Youinvest, having confirmed that the new FX commission of 1% will also apply to non-CREST stocks (for these, there was previously an FX charge of 0.25%, but a £10 custody and settlement supplement which has now been absorbed into the FX fee). Dividends will be converted to GBP at a FX commission of 0.5%, unchanged from the previous rate).

I’ve made a number of updates to the UK online stockbroker comparison table and individual entries for UK international stockbrokers in the directory to reflect fee and service changes over the past few months. Most of these are relatively trivial changes, but there have been a handful of more significant events.

Charles Stanley has stopped offering personal CREST accounts through its online Charles Stanley Direct arm (the former Fastrade service) and has hugely increased the fees for the service through the Charles Stanley telephone broking service (effectively to £420 per year once all fees are taken into account). A number of the firm’s other charges and commissions have also increased recently, suggesting that the traditional brokerage business is now concentrating solely on fairly large clients and steering all smaller accounts to Charles Stanley Direct (which represents its attempt to take on the part of the market currently dominated by Hargreaves Lansdown). Investors looking for a more low-cost CREST sponsorship now seem to be limited to Redmayne Bentley or Stocktrade. The personal CREST account comparison table has been updated accordingly. UPDATE: The Fidelity Share Network service, which is based on Charles Stanley’s online platform, will apparently continue to offer CREST sponsorship on the same terms as before, even though Charles Stanley’s own-brand service won’t.

Meanwhile, Stocktrade has made some fairly significant changes to its service. These include:

Many international markets are now available online. Previously overseas stocks could only be dealt by phone.

Online and phone dealing rates have been made the same

Investors can now hold foreign currency in their accounts, rather than settling only in GBP as before

FX conversion fees have been switched to a tiered basis. Under the old charges, Stocktrade followed a rather unusual approach of converting at market rates, but charging a fixed fee for doing so. The new system looks as if it should be more favourable to smaller accounts.

Saxo Bank is introducing an inactivity charge for UK clients – £25/quarter, waived if you trade once in the quarter. The new fee applies to dealing accounts only, not to ISA and SIPP accounts (although these are already subject to annual administration fees). This is obviously a change for the worse for less frequent investors, but is not surprising – there is a clear trend towards charging more admin, inactivity and custody fees among brokers, reflecting the loss of revenue from lower levels of trading activity in recent years.

There have been a number of changes to services offered by UK brokers over the last few weeks. I’m still in the process of updating all the pages to reflect these, but here’s a brief summary of the major ones:

Saxo Bank has closed its Modern Wealth Management service and is transferring existing clients to the Saxo Trader service. This seems to have positive and negative implications: The firm appears to be retreating from the UK fund supermarket business altogether, but is bringing an ISA wrapper to Saxo Trader, which may now be the most cheapest ISA for international markets where CREST settlement isn’t available.

Charles Stanley has closed its Fastrade service and relaunched it as Charles Stanley Direct. Changes are extensive – the key ones are that online trading fees have been reduced to £10 per trade, but there is now a custody fee of 0.25% per year (min £20, max £150) waived if you trade more than six times every six months. Given that one of the Fastrade service’s strongest selling points was that it offered at-cost personal CREST membership, the introduction of a custody fee will probably work out as a cost increase for less active traders using it for that purpose.

I’ve also overhauled the Barclays Stockbrokers profile to merge the entries for the International Trader and Foreign Dealing Account into one record – it seems slightly more logical that way, since an investor can run both services within the same account.

I’ve recently noticed that UK discount funds broker Commfreefunds as stopped taking on new clients – this is apparently because the firm is planning to launch a new service, presumably in line with the changes brought about by RDR and the platform review.

The firm was one of the cheaper options for investors with smaller portfolios to access the Cofunds supermarket, rebating all broker commission in exchange for a 0.19% annual fee. With it now out of the market for now, Interactive Investor will generally remain the cheapest Cofunds option for larger portfolios, while Clubfinance is probably the lowest-priced option for smaller ones (although ICICI’s new service may be competitive for those in between).

There are a couple of updates to fees at two Singapore brokers. OCBC Securities has slightly reduced its commissions on the higher tiers for Singapore stock trades – trades S$50-100k are now 0.22% from 0.275% and trades above S$100k are now 0.18% from 0.20%. This brings it in line with most of its local peers for online Singapore trades.

It’s a small change, but at least it’s in the client’s favour. DBS Vickers appears to have gone in the opposite direction. A reader has pointed out some significant alterations to the firm’s fee schedule for some international markets. (These apparently came in a little while ago, but neither I nor anyone I know uses DBS, so I wasn’t aware of it until now.)

The new markets are Austria, Denmark, Finland, Greece, Ireland, Poland, South Africa and Spain and all relevant new currencies have also been added (Danish Krone, Polish Zloty and South African Rand). Rates look reasonable – for online trades, the euro markets are €19 (US$25) like others already on the platform, Denmark is DKK160 (US$28), Poland is PLN90 (US$29) and South Africa is ZAR225 (US$27). However, there is of course a foreign currency conversion charge on top, of up to 1%.Continue reading »